Pre-Action Protocols from 1st October 2017

Pre-Action protocols are changing. We'll update this page soon but if you want the detail then there is a link to the protocols below.

This is Hill Dickinson's view on the matter

The Pre-action Protocol for debt claims comes into force on 1 October 2017 and will potentially have a severe impact on a business if it has outstanding debts due from individuals.

The Protocol will apply to any business (in limited form, partnerships, sole traders and public bodies) when claiming payment of a debt from an individual (which is defined to also include a sole trader).

The Protocol does not apply to business-to-business debts unless the debtor is a sole trader and describes the conduct the court will normally expect of parties prior to court proceedings being commenced. The Protocol does not apply if the matter is covered by another pre-action protocol such as construction and engineering or mortgage arrears.

The aims of the Protocol are to:

‘(a) encourage early engagement and communication between the parties, including early exchange of sufficient information about the matter to help clarify whether there are any issues in dispute
(b) enable the parties to resolve the matter without the need to start court proceedings, including agreeing a reasonable repayment plan or considering using an Alternative Dispute Resolution (ADR) procedure
(c) encourage the parties to act in a reasonable and proportionate manner in all dealings with one another (for example, avoiding running up costs which do not bear a reasonable relationship to the sums in issue) and
(d) support the efficient management of proceedings that cannot be avoided.’

A creditor will have to include with its letter before claim a template information sheet and a reply form in all cases. The letter before claim should contain:

  1. the amount of the debt
  2. whether interest or other charges are continuing
  3. where the debt arises from an oral agreement, who made the agreement, what was agreed (including, as far as possible, what words were used) and when and where it was agreed
  4. where the debt arises from a written agreement, the date of the agreement, the parties to it and the fact that a copy of the written agreement can be requested from the creditor
  5. where the debt has been assigned, the details of the original debt and creditor, when it was assigned and to whom
  6. if regular instalments are currently being offered by or on behalf of the debtor, or are being paid, an explanation of why the offer is not acceptable and why a court claim is still being considered
  7. details of how the debt can be paid (for example, the method of and address for payment) and details of how to proceed if the debtor wishes to discuss payment options and
  8. the address to which the completed reply form should be sent.

The creditor should also:

  1. enclose an up-to-date statement of account for the debt, which should include details of any interest and administrative or other charges added or
  2. enclose the most recent statement of account for the debt and state in the letter of claim the amount of interest incurred and any administrative or other charges imposed since that statement of account was issued, sufficient to bring it up to date or
  3. where no statements have been provided for the debt, state in the letter of claim the amount of interest incurred and any administrative or other charges imposed since the debt was incurred
  1. enclose a copy of the information sheet and the reply form in the form annexed to the protocol and
  2. enclose a financial statement form as annexed to the protocol

If the debtor does not reply to the letter before claim within 30 days, the creditor may commence court proceedings.

The debtor should use the reply form for its response. The debtor should request copies of any documents it wishes to see and enclose copies of any documents it considers relevant, such as details of payments made but not taken into account in the creditor’s letter of claim.

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